Advisors Increase Crypto Allocations as Merrill Lynch Warns of Significant Risks
From the desk of Jim Eccleston at Eccleston Law
Financial advisors are placing more client assets into digital currencies, even as major firms caution investors about the asset class's volatility and speculative nature. InvestmentNews reports that recent industry data and regulatory filings reflect this tension between growing client demand and heightened risk awareness.
According to the Bitwise/VettaFi 2026 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets, 32 percent of advisors allocated crypto investments in client accounts in 2025, up from 22 percent in 2024. The survey included 299 advisors across various business models, reporting the highest level of crypto usage in its eight-year history.
InvestmentNews reports that access to crypto within client accounts has also expanded. 42 percent of advisors can now purchase digital assets for clients, compared to 35 percent in 2024 and 19 percent in 2023.
At the same time, major firms continue to refine their approach. As reported by InvestmentNews, Bank of America plans to permit a 1 percent to 4 percent advisor-endorsed allocation to certain digital assets beginning next year for clients on its Merrill, Bank of America Private Bank, and Merrill Edge platforms. Previously, qualified clients could purchase approved crypto exchange-traded funds, but advisors could not recommend them. The policy change allows advisors to make those recommendations within defined limits.
Despite expanding access, Merrill Lynch issued strong warnings about the risks of crypto assets in its updated wrap fee program brochure filed with the Securities and Exchange Commission for its Investment Advisory Program. According to InvestmentNews, the firm described crypto investments as highly speculative and emphasized their limited operating history.
The disclosure states that speculative trading drives a significant portion of crypto demand, and that media coverage and influencer commentary can materially affect pricing. Merrill also warned that crypto prices have exhibited extreme volatility and can decline rapidly, resulting in a total loss of principal. InvestmentNews reports that the filing further noted that concentrated ownership among large holders may trigger sudden price drops if those holders liquidate positions.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, merrill lynch, crypto
